Why Aussie spirit makers need a tax break

By Sam Casey

Spend enough time with them and you will hear whisky makers both agonise and laugh about the “angels' share” – a quaint term used to describe the loss of whisky by evaporation through the porous wooden barrels that hold the precious drop.

Despite their success, Australian craft distillers are burdened with a tax regime that their small grape-growing and beer brewing cousins have escaped. Micro-brewers and small winemakers enjoy generous rebates on the tax they pay, whereas craft distillers are forced to take on their international, mass-produced competitors with a very large monkey strapped firmly to their collective back in the form of taxation.

Bright future - maybe

“I was astounded to find that 95 per cent of gin consumed in Australia was imported. The tax structure doesn't help – craft sprit production in Australia is taxed at a ridiculous level," MacKenzie says.

"Having said that, we are seeing some fantastic Australian spirits starting to emerge and there's no reason we cannot build a significant domestic industry and take on the world."

For every bottle of gin it sells, Four Pillars makes a profit of around $10. The tax man, however, takes $30. It's a similar story for other local spirits producers.

This hurts the producers' ability to grow, employ more staff and compete internationally. It also limits the ability of Australian drinkers to enjoy a local drop.

Keeping the local local

Bars such as Melbourne's Bad Frankie are trying to do their bit to add a healthy measure of patriotism to the neighbourhood local by only stocking Australian products behind the counter.

“I travelled to Bourbon county, Tequila, Cognac and the highlands of Scotland and the best thing about drinking there was that it was the local drop made by the local people. It was the culture,” Costello says.

“In Australia we have a wonderful new culture of amazing craft spirits made by people who don't make them like their father or their father's father, they make them just the way they want to.”

Freeing the spirit

In the wake of the local collapse of car manufacturers Holden and Ford, there has been much said over the past year about the future of Australian manufacturing; indeed, whether it even has one.

One way forward is to play to local strengths. The largest and biggest-spending middle class in history is seeking out Australia's good food, fine wine, and increasingly its craft whiskies, gins and vodkas. These are ripe for exportation and, with their developing reputation for quality, would surely take pride of place in bars, restaurants and living rooms around the world.

To truly realise the potential of craft spirits in Australia will require Treasurer Joe Hockey to give craft distillers the same rebates that have allowed small winemakers and brewers the opportunity to grow, create jobs and take Australia to the world.

D'Marge is one of Australia's most popular men's style and fashion blogs.